China’s February home prices fell in more than half of the 70 cities monitored by the government with only three cities recording gains as the country maintained curbs on the property market.
Prices fell in 45 cities last month as compared with January, while 22 cities were unchanged, the National Statistics Bureau said in a statement on its website today. That compares with 47 cities recording a decline in January. New home prices in the cities of Shanghai, Beijing, Shenzhen and Guangzhou dropped for a fifth month.
Premier Wen Jiabao said last week China’s home prices remain far from a reasonable level and called on the government not to slacken efforts to regulate the housing sector. Relaxing the curbs could cause “chaos” in the market, Wen said. China’s two-year campaign to rein in home prices has included measures such as higher down payments and mortgage rates, and home purchase restrictions in 40 cities.
“With more supply coming in spring, prices will fall further,” said Lan Shen, a Shanghai-based economist at Standard Chartered Plc. “There will not be a total reversal of the government’s tightening policies this year and any sort of policy fine-tuning will have a limited impact of the market.”
Only the northern city of Baotou, the eastern city of Jinan and northwestern city of Xining posted gains of 0.1 percent in home prices. In January, no city posted gains for the first time since the government began releasing data at the start of 2011 for 70 cities instead of a national average.
Beijing, Shanghai Prices
Among major cities, February new home prices in Beijing fell 0.1 percent from January, while prices dropped by 0.2 percent in Shanghai. The southern business hubs of Guangzhou and Shenzhen both declined by 0.2 percent.
The eastern city of Wenzhou posted the biggest drop for the fourth month, with home prices declining by 0.5 percent from January and 8 percent from last year, according to the statistics bureau. A credit squeeze on smaller businesses in the city prompted Premier Wen to visit in October and pledge financial aid.
Today’s figures came after private data also showed the home market continued to cool. China’s February home prices posted the biggest decline in 19 months, according to SouFun Holdings Ltd., the nation’s biggest real estate website owner.
New home prices fell in 27 out of 70 cities in February from a year earlier, the government data showed today.
China Vanke Co., the country’s largest publicly traded developer, said contracted sales in the first two months fell 27 percent from a year earlier, while they slumped 31 percent at Poly Real Estate Co., the second-biggest developer traded on Chinese exchanges.
Existing home prices in Beijing and Shanghai both dropped 0.2 percent from January, according to the statistics bureau.
“The current administration will not relax the overall tightening stance on the housing market,” wrote Barclays Capital Asia Ltd. economists led by Jian Chang in a note to clients on March 14. “We expect a further decline in property prices, especially in major and coastal cities.”
The country’s home sales declined 25 percent in January and February, according to data from the statistics bureau on March 16. The value of homes sold fell 25 percent after surging 26 percent in the first two months of 2011.
Home prices may post a “single-digit” decline this year, billionaire developer Vincent Lo, chairman of Shui On Land Ltd., said in an interview in Beijing on March 8. Home prices will not see a crash, he said.